Impact investing is investment made into companies, organizations, and funds with the intention to generate a double bottom line with positive social and/or environmental impact alongside a financial return. While true environmental, social and governance (ESG) impact investing can be a discipline in itself, you can take some steps right now. Here are some ways to be impactful with your asset allocation.
In pursuing impactful investing strategies, investors do not have to take a niche approach, focusing on pure-play companies or green projects. The United Nation’s sustainability goals have provided a framework of areas where large-scale investments can be channeled. While measuring and comparing the exact positive impacts of investment portfolios remains a challenge given the variety of locations and specific circumstances, we consider broad-based ESG-focused investments aiming to minimize negative externalities represent a useful tool. Additional overlay focusing on positive efforts by companies can be achieved via indices and assessments based on revenue exposure to sustainable products.
Read the full article by Global Head of ESG Mamadou-Abou Sarr and Senior ESG Research Analyst Julia Kochetygova from Nothern Trust Asset Management